(A) Types of accounts or securities. The town shall invest in the following accounts, or securities:
(1) (a) Fully collateralized or insured interest bearing checking accounts, savings accounts and certificates of deposit at commercial banks with amount not to exceed $250,000 or the current FDIC limit if the bank is not designated as a qualified institution by the Investment Committee; and
(b) A commercial bank may use any securities authorized by the public deposit protection act as collateral.
(2) (a) Certificates of deposit at savings and loan associations insured by the FDIC or other agency of the federal government with amount not to exceed $250,000 or the current FDIC limit; and
(b) Deposits with savings banks insured by the FDIC with amount not to exceed $250,000 or the current FDIC limit.
(3) (a) Any security issued by, guaranteed by, or for which the credit of any of the following is pledged for payment: the United States, a Federal Farm Credit Bank, the Federal Land Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Government National Mortgage Association;
(b) Any security issued by, guaranteed by, or for which the credit of the following is pledged for payment: an entity or organization which is not listed in subsection (A)(3)(a) of this section but which is created by, or the creation of which is authorized by, legislation enacted by the United States Congress and which is subject to control by the federal government which is at least as extensive as that which governs an entity or organization listed in subsection (A)(3)(a) of this section. No security may be purchased pursuant to this subsection (A)(3)(b)2. unless, at the time of purchase, the security is rated in its highest rating category by one or more nationally recognized organizations which regularly rate such obligations.
(4) Colorado investment pools: the town may participate in a Colorado public investment pool, the Colorado Local Government Liquid Asset Trust or other similar local government pools organized in conformity with C.R.S. Title 24, Article 75, Part 7, which provides specific authority for pooling of local government funds;
(5) Any money market fund that is registered as an investment company under the Federal Investment Company Act of 1940, as amended, if, at the time the investing public entity invests in such fund:
(a) The investment policies of the fund include seeking to maintain a constant share price; and
(b) No sales or load fee is added to the purchase price or deducted from the redemption price of the investments in the fund.
(6) No load mutual funds that invest in mortgage backed securities issued by the Government National Mortgage Association (GNMA) or the Federal National Mortgage Association (FNMA), or the Federal Home Loan Mortgage Corporation (FHLMC); and
(7) Taxable municipal securities: taxable obligations of political and governmental subdivisions may be purchased. The issue must be rated at least “AA” by a nationally recognized security rating organization.
(B) Criteria for choice.
(1) If a specific maturity date is required for cash flow purposes, bids will be requested for instruments which meet the maturity requirement. If no specific maturity is required, a market trend (yield curve) analysis will be conducted to determine which maturities would be most advantageous. After selecting a type of instrument at least two bids should be obtained from similar institutions. Two bids are not required if treasury bills or notes are purchased at a treasury auction or for overnight or open term repurchase transactions.
(2) The town may place an investment with a local institution that is not the highest bidder, provided the bid is not more than 25 basis points below the highest bidder.
(3) The rate of interest must be at least equivalent to the average rate of return available in the market place.
(4) It is the responsibility of the Finance Director to demonstrate compliance with this section. A
LOCAL INSTITUTION is defined as a bank or savings and loan association doing business inside the corporate limits of the Town of Vail and/or Eagle County.
(C) Interest allocation method. All investments will be in the name of the town and in most cases it will be a general policy of the town to pool all available operating cash into a treasury cash management investment portfolio. However, a specific investment purchased by a specific fund shall incur all earnings and expenses to that particular fund. Interest earnings from pooled funds shall be allocated to all participating funds based on the average monthly cash balance of each fund included in the common portfolio for the earning period.
(D) Funds borrowing from Pooled Cash Fund. All funds may borrow cash from the pooled cash fund in order to cover shortfalls in their equity in pooled cash. The interest rate charged shall be equal to the interest rate earned on the pool at the time the money is borrowed.
(Ord. 3(1997) § 1; Ord. 24(2016) §§ 7, 8, 9)